The fuel cell unit is expected to begin operating sometime this fall, said Ray Smith, executive director of public utilities. The substation is next to Proton Energy's headquarters on Research Parkway.

Smith and Rob Friedland, a Proton Energy executive, said the pilot project has benefits for both the town and the company.

"We're looking to see whether there might be a market for our fuel cell system in the utility industry," said Friedland, who is a senior vice president for hydrogen technology with the company. "That's what this project is meant to look at."

Proton Energy makes regenerative fuel cells that use water and hydrogen to help generate clean, emissions-free power. The fuel cell system that will be used in the pilot program will generate about 15 kilowatts of power, which Smith said is enough to run three clothes driers simultaneously.

For the town, it's an opportunity to save a little on backup power costs while providing an important boost to a major local company, Smith said.

"If it turns out that they're able to develop this into a market for the utility industry, it's going to mean that Proton Energy will be producing more fuel cells, hiring more people and using more power, all of which ultimately benefits the town," Smith said.

The costs associated with installing the fuel cell system at the substation, estimated at $500,000, will be paid for by the Connecticut Clean Energy Fund, Friedland said.

The fund was created by the General Assembly in 1998 in an effort to promote renewable energy resources and technologies. Money used to finance the initiatives comes from a surcharge on utility bills.